I do coding work for a US Fortune 500 company in the financial service sector. On a lark, a coworker asked if I could personally write them a program to automate some audio processing for their job (this has absolutely nothing to do with my job responsibilities). In my spare time, I wrote a quick and dirty solution that worked, a total of 150 lines of Python using open source tools. We asked if it could be sponsored as an internal project and were rejected because audio processing has nothing to do with the company's products, goals, or any market we're even tangentially related to.

I am considering starting from scratch and developing the project in my spare time, and opening a business to sell it. To reiterate, I know I can't use any of the code I've already written.

I talked to my department director about this and he said it'd be a good learning experience to figure out how to set up billing, do my own marketing, customer service, etc. However, I don't have this in writing, and frankly don't care if I did, because if this is something the company would come after me for I don't want any part of it. I love my job and this would only be a small source of side income.

My question: Is it unethical to spin out this project into a private LLC, given the original idea came from a coworker and I've already shared working code with them? Is this acceptable behavior in the world of business?

  • Avoid answering questions in comments. – user1717828 Aug 25 at 19:17
up vote 7 down vote accepted

Your contract with the employer is likely to state something about not working with competitors. Some companies explicitly put in the contract that external projects must first be offered to the employer etc. It’s a good idea to consult a lawyer and go over your agreement to determine how to ensure legal right to proceed with the project.

Once that is out of the way, there should be no ethical barriers to proceed.

You do need to consider the culture at your workplace or the character of your superiors. It may be that legally and ethically you will be in the right, but the possibility of adverse reactions need to be taken into account.

  • 1
    Consulted lawyer for the first time after reading this. There are some roadblocks but there is a path forward. Thanks for taking the time to help me. – user1717828 Aug 28 at 11:58
  • It seems the culture is OK with this since the department using the code declined to sponsor it and his boss encourage the entrepreneurial spirit of starting something. There is still the potential contractural limitation so once you verify that you should be ethically sound. – Bill Leeper Aug 29 at 14:03

Legalities aside.

Do your homework carefully, opening and running a business isn't as easy as you may imagine. My advice would be to forget it unless you see the potential for it to become your sole source or a major source of income, otherwise you may find the headaches are not worth the dribble feed of money.

If you see the potential and are interested in committing to chasing it, then by all means jump in and give it a try. But I don't see that sort of commitment, and audio processing seems an unlikely money maker.

The cons are everything from paperwork, financial outlay, finding a market, potential issues with your job to losing personal time you normally spend with family etc,.

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